Treasurer Joe Hockey has committed Australia to an economic growth rate of 3 per cent, well above the official forecast of 2.5 per cent, and foreshadowed sweeping reforms in the budget aimed at cutting unemployment.
The commitment comes at the end of a two-day summit of the world's most important treasurers and central bank officials including the US Federal Reserve head Janet Yellen, International Monetary Fund managing director Christine Lagarde and leaders from China, Japan and India.
The G20 communique commits the leaders to develop policies that aim to lift their nations' combined gross domestic product by more than 2 per cent over five years. The boost would add more than $2 trillion to the world economy.
But the language of the communique is weaker than expected and India's Finance Minister, P. Chidambaram, said he did not consider the growth aim binding.
"I don't think it intends to bind countries; it is a goal," he said.
"In fact it's not so ambitious as the language appears to say … cumulatively over a period of five years we will have an additional
2 per cent growth, that works out at roughly 0.4 per cent a year additional growth.''
The summit produced a breakthrough on international tax avoidance. All nations agreed to adopt a common reporting standard for the automatic exchange of tax information and to detail their plans for implementing it by September.
During the tax session of the summit Mr Hockey told international finance ministers he was at a loss to know what to say to a small-business person in Sydney who is competing against ''a massive multinational that doesn't have to pay tax and yet they have to pay tax''.
''We are mindful of this and we are absolutely determined to get real action on it,'' Mr Hockey told the closing press conference. He defended the language used about the aim for higher growth, saying the important thing was that finance ministers and central bank governors had ''decided to put a number on'' an increase in growth.
''Each country needs to shape its own plan. We do not have central planning for individual economies,'' he said.
The plans would be reported back to the G20 leaders summit in Brisbane in November. They would have to go beyond supportive interest rates.
''We have to earn economic growth,'' Mr Hockey said. ''For some countries it will be labour market reforms and some competition policy, for others it may be tax reform. For all of us it seems to be private investment in infrastructure.'' Australia's reforms would aim to lift economic growth back above 3 per cent.
''The only way we can stop the rise in unemployment in Australia and in fact start reducing unemployment is to have growth that is faster than 3 per cent. Currently we are at around 2.5 per cent. We have got to look at ways to speed up our economy.''
Ms Lagarde said the aim to lift global growth agreed to by G20 members was attainable.
''Measures to support investment, boost trade and promote competition will be essential for more sustainable and robust growth,'' she said.
An IMF staff paper presented to the summit suggested that Australia cut its employment protection legislation by 10 per cent and axe regulations holding back service industries.
Mr Hockey promised that his actions would be ''entirely consistent'' with the Coalition's election promises.